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Meet AIM's survivors 20 years on
By Andrew Hore | Fri, 12th June 2015 - 08:00
AIM celebrates its 20th anniversary on 19 June and, even though there are more than 1,000 companies currently on AIM, there are only a few that joined in 1995 that are still traded on the junior market. And many of these have had more than one guise in the past two decades.
There were 121 companies that joined AIM between 19 June 1995 and the end of that year. Of these, 18 are still traded on AIM in some form and four others are on the Main Market.
AIM's first 10 constituents
None of the ten companies that joined AIM on the first day of dealings are still on the junior market. The only one that remains on the London market is investment company Athelney Trust (ATY), which invests in smaller companies with solid balance sheets and good growth prospects. Main Market-listed Athelney is small itself, but it has grown in size from just under £1 million to £4 million. This has been done without issuing shares.
Athelney initially raised money at 50p a share in July 1994. Since moving to the Main Market on 24 September 2008, Athelney has increased its NAV from 135.8p a share to 231.7p a share at the end of April 2015, with AIM companies accounting for just over one-quarter of the portfolio. That is an impressive performance considering the timing of the move.
Since 2008, Athelney has increased its dividend each year - the latest was 6.7p a share - and it has paid total dividends of 35.5p a share. Since launch, 59.3p has been paid in dividends so the original investors have got more than their initial investment back.
Six of the first ten companies moved to the Main Market, with Athelney the most recent and the only one left. Lorien returned to AIM and was taken over, while the other four– Country Gardens, Old English Pub Company, Dawson Holdings and Gander Holdings - were also taken over.
There were mixed fortunes for these companies, but Old English Pub was originally valued at £6 million and, in 2001, was acquired by Greene King (GNK) for £105 million. The introduction price was 54p a share and the bid was at 150p a share. Garden centres operator Country Gardens started with a valuation of £11.7 million and was bought by its larger rival Wyevale Garden Centres for £111 million in November 2000 - equivalent to 400p a share. The flotation price was 65.5p. To, put these two bids in perspective, when AIM started its market value was £82.3 million!
In contrast, newspaper and books distributor Dawson Holdings (DWN), which was founded on London's Cannon Street in 1809, was acquired by Smith News for £17.3 million, having joined AIM at a valuation of £22.4 million and been a multiple of that valuation at one stage when it was a constituent of the FTSE All Share index.
South America-focused mining company Brancote was taken over by Meridian Gold Inc in August 2002. Brancote shareholders received 0.1886 of a Meridian share for each Brancote share which valued the company at $368 million. Brancote was initially valued at £5.7 million.
There is still a link with AIM. Brancote spun off Patagonia Gold (PGD), formerly known as HPD Exploration, in 2001. This was so that Brancote could concentrate on the Esquel gold project in Argentina. Patagonia was originally quoted on Ofex and moved to AIM in March 2003. So there was a gap when neither company was on AIM.
Norhomes was also taken over, while Norcity II was placed in voluntary liquidation in December 1996. The other original AIM company was Formscan, which changed its name to Inspectron and decided to leave AIM on 11 August 2009 after just over 14 years. It was the last of the original ten to leave.
Long service medal goes to…
The longest serving AIM company is Multimedia Corporation, which floated on 13 July 1995 - the eighteenth company to join. It became a technology investment company called Illuminator in 2001 and switched its strategy to South Africa in 2006. The company has just changed its name from Blackstar Group SE to Tiso Blackstar Group SE (TBGR) following the reverse takeover of Times Media and acquisition of 22.9% of South African investment company Kagiso Tiso. This deal should value the enlarged company at £210m. The Malta registered company also has a quotation on AltX in South Africa.
Three of the 18 companies that remain on AIM have spent some time on the Main Market, but returned to their original home. These are Silence Therapeutics (SLN), 21st Century Technology (C21) and Panmure Gordon (PMR). All three of these companies moved to the Main Market in the late nineties when they had different names, and they were worth a lot less when they returned than when they left.
Broker Durlacher reversed into Financial Publications and then moved to the Main Market in 1999 before returning in April 2005 after the reversal of rival broker Panmure Gordon into the company. At one stage, Durlacher was valued at well over £1 billion.
TomCo Energy (TOM) left AIM in August 2009, after being suspended for six months because of concerns about its finances. It rejoined on 21 July 2011 when it raised additional cash, so it has not been on AIM for the full 20 year period, but it has been included in the eighteen.
Recruitment firm Graduate Appointments had already become Megalomedia by the end of 1995. Maurice and Charles Saatchi, who had been ousted from advertising agency Saatchi & Saatchi, reversed stakes in a contract publisher and special effects firm Framestore. Maurice Saatchi's wife Josephine Hart had previously swapped a stake in publisher Haymarket, where the two met, for Graduate Appointments and then brought it to rule 4.2 prior to the introduction to AIM. The vast majority of the early AIM entrants came from rule 4.2, a matched bargains trading facility, which was being closed by the London Stock Exchange.
Megalomedia bought other digital media businesses, but reverted to being a shell in October 2001, after returning £16.8 million to shareholders at 29p a share. Cake maker Memory Lane reversed into it in August 2002 and it became Finsbury Food (FIF).
It is noticeable that four companies that remain on AIM joined on 29 September, but as 14 companies joined on that day it is not as surprising as it first appears.
(click to enlarge)
The market values in the table are not directly comparable because there will have been additional shares issued in nearly all cases. Silence Therapeutics is much larger in terms of valuation but the share price, adjusted for consolidations, has fallen by more than 90% since it floated as Stanford Rook.
In Westmount Energy's (WTE) case, it returned 65p a share to investors at the beginning of 2009, which is much more than the original flotation price of 15p a share.
Most of the better performing companies appear to be those that have grown their original businesses and in some cases have refocused on their core operations. NWF (NWF) sold its garden centres and other retail operations, while ECO Animal Health (EAH) sold various industrial activities to focus on the core animal health treatments. Property companies Caledonian Trust (CNN) and Wynnstay Properties (WSP) have made solid progress.
Staying in the same business does not always work, though. Northern Petroleum (NOP) was the last company to join AIM in 1995. In those days it was focused on oil and gas exploration in Russia and eastern Europe rather than Canada as it is now. Despite a number of share issues it is worth less than it was 20 years ago.
Since property asset manager and investor First Property (FPO) reversed into taxi services provider Hansom Group at the end of 2000, it has managed to ride out the problems in the property market by focusing outside of the UK, although the share price still appears to be slightly below where it was when Hansom floated. Finsbury Food has also done well since moving into food, although progress was not smooth. The share price has even managed to get back to the level when Graduate Appointments was introduced to AIM.
It can be difficult to obtain share prices going back to 1995, but it appears that the share prices of NWF, ECO Animal Health, Wynnstay Properties, Caledonian Trust and Westmount Energy, adjusted for cash distribution, are all trading above the level they were when they joined AIM even if dividends are not taken into account.
This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser